Functions of Bangladesh Bank
Functions of Bangladesh Bank
Functions of Bangladesh Bank
(FIN-232)
Submitted By:
NAMES ID’S
Raihan Nawajesh 2006110000230
Ayesa Siddika 2006110000029
Nisha Aktar 2006110000003
Submitted For:
Minhajuddin Ahmed
Assistant Professor,
Department of Business
Administration
School of Business Studies
Southeast University
22/04/08
Minhajuddin Ahmed
Assistant Professor
School of Business
Department of Business Administration
Southeast University,
Banani, Dhaka.
Dear Sir,
Yours sincerely,
Name of group
members: ID’s:
Raihan Nawajesh
2006110000230
Eptekhar Ejaj
2006110000008
Jannatul Ferdous
2006110000267
Table of Contents
2) Exchange rates
3) Monetary policy
4) Bangladesh Bank
Investments
5) Loan classification &
provisioning
6) Social development in BB
9) Grameen phone
Management
10) Benefits Provided For
Grameen phone Employees
Bangladesh Bank
Branches:
Barishal Office
Bogra Office
Chittagong Office
Khulna Office
Motijheel Office
Rajshahi Office
Rangpur Office
Sadarghat Office
Sylhet Office
Exchange Rate:
Growth outcome and outlook: Projection for real GDP growth for
FY07 has been revised down to 6.5 percent following setbacks in the
agriculture sector that experienced a moderate growth mainly due to
inadequate rainfall, distribution problems relating to fertilizer, and
shortages of power for irrigation.
Growth in the industry sector continues to be strong in FY07 reflecting
steady growth in export-oriented manufacturing and increased
domestic demand. Industry and service sectors are expected to
continue the robust performance in FY08. Following some government
measures, growth in agriculture is expected to be higher than the
previous year. Overall, real GDP growth is projected to be 7.0 percent
in FY08.
1. Introduction:
2.1 Growth: During the last three years real GDP grew on an average
at above 6.0 percent up to FY 06. The growth momentum though
expected to continue in FY07, the revised estimate of GDP growth rate
has been revised lower to 6.5 percent from the projected range of 6.5–
6.8 percent largely reflecting setback in agriculture that faced supply
failure of fertilizers, shortages of power for irrigation and inadequate
rainfall. Production of aus and aman crops were 1.51 million and 10.80
million tons in FY07 against 1.75 million and 10.80 million tons
respectively in FY 06. Output of Boro, the largest crop in the year, is
estimated at 14.50 million tons compared to 14.00 million tons in FY
06. Production of maize has increased as farmers have largely
substituted maize for wheat.
Since global commodity prices are not projected to fall in 2008 (WEO,
IMF, April 2007) these measures may only slightly lessen the pressure
on consumer prices. Hence monetary stance of the Bangladesh Bank
over the coming quarters will continue to target the containment of
annual average inflation within a range of 6.5–7.0 percent for FY08.
2.3 External sector: Exports and imports grew by 18.50 percent and
17.83 percent
respectively, year on year basis in first ten months of FY07. Growth in
worker’s
remittances were also steady at 24.52 percent up to June ′07. Surplus
in the current account balance emanating mostly from robust growth
in exports and workers remittances in spite of higher growth in imports
helped releasing pressure in foreign exchange market that prevailed in
the last part of H1 FY07.With the marked increase in supply of foreign
currency the foreign exchange reserves continued to build up to reach
an all time high of 5.1 billion US dollar.
2.4 Fiscal Sector: The overall deficit in the revised budget of the
government for FY07
remained the same as in the original estimate and amounted to Tk.
173.64 billion or 3.7 percent of GDP, funded by Tk. 73.33 billion in
foreign loans and grants and Tk. 100.31 in domestic borrowings
including bank borrowing of Tk. 65.31 billion. Actual outturn in bank
borrowing is less at Tk. 59.8 billion as on 30 June ′07. The budget for
FY08 projects an overall deficit of Tk. 223.13 billion or 4.2 percent of
GDP, to be funded by Tk. 42.55 billion in foreign grants, Tk. 63.05
billion in foreign loans and Tk.117.53 billion in domestic borrowing
including bank borrowing of Tk. 72.53 billion. BPC’s accumulated loss
of Tk. 75.23 billion is included in the budget.
From the 4th quarter FY07, BB was allowed to offload the devolved
amount to the banks and financial institutions at the cut off rate of last
auction for the remaining period. Recently the CDMC has agreed in
principle that from the beginning of FY08 the devolvement system will
be replaced by a system where the extra amount will be devolved on
the primary dealers on the basis of underwriting. This new system will
enthuse the primary dealers to create a secondary market for
government securities. The new system will make it easier for BB to
improve its monetary management.
3.2 Monetary Stance for FY08: Keeping in view the prevailing price
situation and
enhanced excess liquidity emanating from moderating private sector
credit demand and increase in net foreign assets, BB’s monetary
stance will continue to be cautious in FY08.
Introduction
1.
On March 24, 1994 the Bangladesh Taka was declared convertible
for current account transactions in terms of Article VIII of the IMF
Articles of Agreement.
The declaration symbolized a turning point in the country’s
exchange management and exchange rate systems. The period
preceding this declaration saw an intensification of reforms
undertaken by Bangladesh Bank to ease controls on foreign
payments and exchange rate arrangements. These reforms and the
subsequent further changes have been summarized in the following
paragraphs. The relevant FE Circulars/Notifications contain the
details.
Investment
2.
2. Investment in Bangladesh:
1
With the exception of a few reserved sectors, foreign investors
are free to make investments in Bangladesh in industrial
enterprise. An industrial entity may be set up in collaboration with
local investors or may even be wholly owned by the foreign
investors. No permission is needed to set up such enterprises if
the entrepreneurs use their own funds. However, to avail of
facilities and institutional suport provided by the government,
entrepreneurs/sponsors are advised to apply for registration with
the Board of Investment (BOI). For items in the control list, the
office of the Chief Controller of Imports & Exports (CCI & E)
prescribes the basis and conditions of import entitlement.
2. Remittance of profits:
3
Branches of foreign firms/companies including foreign banks,
insurance companies and financial institutions are free to remit
their post-tax profits to their head offices through banks
authorized to deal in foreign exchange (Authorized Dealers)
without prior approval of Bangladesh Bank.
2. Remittance of dividend/capital gain:
4
Prior permission of Bangladesh Bank is not required for :
- remittance of dividend income to non-residents in respect to
their investments in Bangladesh;
- remittance of dividend declared out of previous year’s
accumulated reserves; and
- dividend and sale proceeds (including capital gains) of shares of
companies listed in a Stock Exchange in Bangladesh. Such
remittance may be effected prior to actual payment of taxes
provided that the amount payable to the tax authorities at the
applicable tax rate is withheld by the company. Remittance of
sale proceeds of shares of companies not listed in Stock
Exchange requires prior Bangladesh Bank permission, which is
accorded for amounts not exceeding the net asset values of the
shares.
3. Local borrowings :
2
Banks in Bangladesh may extend working capital loans or term
loans in local currency to foreign-controlled or foreign-owned
firms/companies (manufacturing or non-manufacturing) operating
in Bangladesh on the basis of normal banker-customer
relationship, without reference to Bangladesh Bank
VISITS ABROAD
8.
8. Booking of Passage: No Bangladesh Bank approval is needed
1 for booking of passage for Bangladesh nationals against payment
in Taka. Prepaid Ticket Advice (PTA) in favour of foreign guests
invited by Government, Semi-Government, autonomous
organizations or bodies affiliated with UN agencies or other
internationally recognized agencies may be issued without prior
approval of Bangladesh Bank.
MISCELLANEOUS REMITTANCES
9.
9. Remittance of membership fees: ADs may remit membership
1 fees of foreign professional, scientific institutions and fees for
application, registration, admission, examination (TOEFL, SAT
etc.) in connection with admission into foreign educational
institutions as per estimate of the concerned institution.
9. Visa fee: Intending travellers may send visa fees through ADs to
3 the embassies of countries that do not have consular offices in
Bangladesh.
1 COMMERCIAL REMITTANCES
0.
Prior permission of Bangladesh Bank is not required by
the Ads for:
1
OTHERS
2.
- Funds from non-resident Taka accounts can be freely withdrawn
regardless of the amounts involved.
Rural Development
The Bank is providing policy advice and investments in rural
infrastructure (roads, bridges, power), water resource management as
well as microcredit programs for the poor. It is also supporting the
government’s disaster mitigation efforts, emphasizing greater
empowerment and participation of affected communities. World Bank
funding for riverbank protection has helped prevent land loss,
settlement destruction, and prevented increases in regional flood
levels. The Bank is also a key development partner in helping the
government design and implement a national program for the
mitigation of arsenic in the country’s drinking water.
CURRENT LENDING
Bangladesh joined the World Bank in 1972, soon after independence.
Since then, the International Development Association (IDA), the World
Bank’s concessional lending window, has financed 174 operations with
loans totaling almost $10 billion equivalent of assistance. In fiscal year
2003, the World Bank approved around $554 million in low-interest
credits for five operations, including the Development Support Credit
commercial Banks
Specialized Banks
Websites:
• www.bangladesh-bank.org
• www.bibm-bd.org
• www.articles2k.com
• www.dnet-bangladesh.org
• www.emeraldinsight.com
• www.en.wikipedia.org